Employee Handbooks: Benefits and Pitfalls

By Brian F. Chandler on January 31, 2012

One of the questions employers frequently have is whether it is good policy to distribute and employee handbooks to employees. The answer I most readily give employers is yes, as long as the handbook is carefully drafted as it might be better to have no employee handbook than an incomplete and/or poorly written handbook.

Employee handbooks may provide many valuable roles for employers. First, employment handbooks help employers think about and implement uniform policies in relation to their employees. Uniformly applied policies help mitigate any argument that an employer enforces policies in a discriminatory or capricious manner. Also, through a handbook, an employer can ensure that employees are given notice about certain policies. For example, a company’s anti-sexual harassment policy may require that an employee promptly report any sexual harassment. If an employee fails to report any alleged sexual harassment and later files a lawsuit against the employer, the employer may assert as a defense that the employee was required to report the harassment so that the employer may take remedial measures.

An employee handbook also may be a convenient method by which to provide employees with certain required notices, such as the required notices under the Family and Medical Leave Act, the Uniformed Services Employment and Reemployment Rights Act, and the continuation of benefits provisions of COBRA.

There are pitfalls in distributing employee handbooks if the handbook is not properly and comprehensively drafted. Perhaps the most dire problem may result from a failure to include the necessary “employment at will” disclaimers in the handbook. In the event such disclaimers are not included, it is possible that a judge may view the handbook as an employment contract. Employers should also be cautious when describing the general procedures used in addressing employee misconduct or poor performance. Without the proper disclaimers, an employee may assert that the handbook procedures provide him with certain due process procedural guarantees. These are just some of the many pitfalls an employer may experience as a result of employee handbooks.

In sum, Virginia employers are usually well served in putting the time and investment into a well-drafted employee handbook. It is always important for counsel to review, if not actually draft a company’s employee handbook in order to ensure the maximum amount of protection is provided to the company and to avoid any drawbacks of handbooks.